OECD: pension funds pass 78 trillion dollars, yet most workers are not saving enough for retirement

Asset-backed pensions have expanded substantially over the past two decades, complementing traditional pay-as-you-go schemes, but governments must do more to promote their use to meet the significant challenges of financing retirement, according to the OECD's Pensions Outlook 2026. Pension fund assets reached 78 trillion dollars at the end of 2025, equivalent to 106 percent of OECD gross domestic product, up from just 62 percent in 2001, an expansion driven by higher contributions, positive investment returns and relatively low benefit payments in many countries.

A contribution gap in nearly every country

Despite this growth, the report finds individuals may not be saving enough for an adequate retirement income. Nearly all OECD countries now face a retirement contribution gap, meaning workers will need to complement mandatory pensions with voluntary contributions to reach their retirement income objective. This gap is 10 percent or more for male employees on average earnings in 17 of the 41 countries covered. Women face a larger gap than men in 17 countries, and the self-employed face a larger gap than employees in 31 countries. In half of the countries studied, the gap is largest for high earners, while in 12 countries low earners need to contribute the most. Overall asset growth also masks large differences: while eight OECD countries have pension assets exceeding their GDP, in 17 others pension assets are below 20 percent of GDP.

The report lays out policies to address the barriers: increasing mandatory contributions, encouraging voluntary employer contributions, nudging individuals towards higher contributions, providing financial incentives, improving financial literacy and addressing specific needs. It says governments should ensure financial advice is carefully regulated, that sustainability disclosure requirements promote transparency, and that the taxation of death-related payments does not undermine the primary role of pensions in financing retirement. 'Even as public spending on pensions across the OECD keeps rising, many workers are not on track for an adequate retirement income,' said OECD Secretary-General Mathias Cormann. 'Asset-backed pensions will help fill the gap. But too many people are not in a plan, start too late or save too little. Automatic enrolment, contributions that rise with pay, smarter investment strategies and sound governance can change that.'

The report identifies registration and qualification requirements, duties of care, disclosure rules and restrictions on remuneration structures as ways to improve financial advice, while stressing careful design. It also calls for more harmonised sustainability disclosures so pension and insurance investors can compare and assess portfolio risks. Tax incentives should support spending pension savings in retirement rather than favouring their transfer as inherited wealth.